One of the questions often asked by small business owners is: can I offer my employees ACA Marketplace coverage and qualify for subsidies? The answer to this is actually yes and no. If you are a small business owner looking to offer insurance to your employees, you cannot apply for the subsidies that individuals shopping on the Marketplace can. However, you can offer your employees plans that are basically identical to individual Marketplace plans, and possibly qualify for a tax credit when you do so. If you run a small business but still want to offer your employees healthcare, you may want to look into the Small Business Health Options Program, or SHOP.
The good news about SHOP is it’s easy to understand: the plans offered look basically the same as those offered on the individual ACA Marketplace. Just as on the individual Marketplace, there are four types of plans that are based on a “metal tier” system. You can choose from Platinum, Gold, Silver, or Bronze plans, and, as Healthcare.gov points out, the levels do not indicate quality of care; rather, the categories are based on how the cost of care will be shared by your employees and your insurance company. Cost sharing for these plans generally look like this:
- Platinum – 90% on average paid by insurance, 10% on average paid by employee
- Gold – 80% on average paid by insurance, 20% on average paid by employee
- Silver – 70% on average paid by insurance, 30% on average paid by employee
- Bronze – 60% on average paid by insurance, 40% on average paid by employee
You can also choose to add dental coverage to these plans, or even offer a stand alone dental plan to your employees if they are interested.
How to Qualify
SHOP is an easy and straightforward way to offer insurance to your employees, but not every business qualifies for it. Your business needs to meet 4 requirements:
- Have 1 – 50 full-time (or full-time equivalent) employees. This does not include you, your spouse, or other family members.
- Offer coverage to all full-time employees. This includes all workers averaging at least 30 hours per week. You can offer coverage to part-time employees, but you are not required to do so.
- Enroll at least 70% of your full-time employees in your plan. However, if an employee already has another healthcare plan, they are not counted as rejecting your plan.
- Have an office or employee worksite that is located in the state whose SHOP coverage you are using.
Also make sure to look at the specific plans offered in your state; they may have other specific requirements.
Now that we’ve looked at what SHOP actually is, let’s take a look at why it might be a good option for you and your business. As mentioned above, both the plan options and requirements are fairly straightforward. There are other advantages to it, as well:
- SHOP offers you choice and flexibility. You can offer your employees one plan, or multiple options, you decide how much to contribute to their premium costs, and you can also decide how long new employees must wait before enrolling. There is also no need to wait for an open enrollment period; you can start offering your employees SHOP coverage at any time during the year.
- You can work with an agent. You don’t sign up through Healthcare.gov, or need to start an account with them. You can work with a trusted insurance agent or broker to help you through the process.
- You may be able to get the Small Business Health Care Tax Credit. This is where your alternative to ACA individual subsidies comes into play. If you meet certain requirements, you can get a tax credit worth up to 50% of the costs of employee’s healthcare premiums. To qualify for the minimum credit, you must have fewer than 25 full-time employees making less than an average of around $52,000; to qualify for the maximum credit, you must have fewer than 10 full-time employees earning less than an average of around $25,000.
Health insurance is complicated, especially if you’re running a small business and trying to figure how you can do the right thing and offer healthcare to your employees. SHOP might just be a way for you to simplify things a bit for yourself – and maybe get a little of that hard-earned money back in your pocket. And remember, whatever type of group health plan you’re looking into, EZ.Insure can help. We’ll connect you with your own personal agent who will answer all of your questions, get you the most accurate quotes, and even sign you up – all for free! Get started with us today by simply entering your zip code in the bar above, or you can speak to an agent by emailing or calling 888-998-2027.